Demographic trends are the foundation for the multi-family residential market and the growth in population continues to bode well for investors and property owners in Alberta.
Alberta’s population continues to grow through immigration, interprovincial migration and natural population increases. Those three are key elements to support the multi-family market in the province.
Recently, ATB Economics reported that close to 5,000 more people moved to Alberta from other parts of the country than left the province in the third quarter of 2021. That comes after Alberta lost residents to the rest of Canada for five consecutive quarters.
Citing Statistics Canada, ATB’s report indicated 22,013 people came to Alberta from another part of Canada during the July 2021 to September 2021 period, while 17,524 did the opposite, for a net gain of 4,489.
Unfortunately, the province did lose 15,882 residents between April 2020 and June 2021.
The most recent net gain in interprovincial migration is a good sign that things have turned the corner as the Alberta economy is rebounding and the province has become attractive from a housing affordability perspective compared to what people are paying elsewhere to either rent or own a home.
It’s been a rough few years for the province beginning in late 2014 when oil prices collapsed, leading to thousands of job losses throughout Alberta. People started leaving Alberta then and rental rates came down with demand falling.
But an economic recovery is good news for residential rental landlords. As more people come to the province for work, it drives up the demand in the multi-family asset, allowing landlords the opportunity to raise rents.
Another good sign of population growth was a recent report by U-Haul which indicated that Alberta had the most one-way U-Haul truck customers in 2021 than any other province. In fact, the province saw a 33 per cent hike in the arrival of one-way U-Haul trucks year-over-year while departures rose just 29 per cent.
“There are initiatives in Alberta that are creating more job opportunities and attracting residents,” said Naga Chennamsetty, U-Haul Area District Vice President of Western Canada, in the report. “In the last year, we have seen a lot of movement into Alberta. More communities are developing in and around major cities. Not only that, but the Canadian Rockies are so accessible to residents here, and they offer a variety of recreational activities. Alberta is one of the best places to make a home.”
In terms of top Canadian cities for incoming traffic by U-Haul, Calgary was fifth overall, Red Deer-Lacombe was 8th, Medicine Hat-Redcliff was 15th and Airdire was 24th. Lethbridge also was mentioned as a notable city that just missed the cut for the top 25 but posted big growth numbers in 2021.
And most people moving to a new city are initially renters.
According to Statistics Canada, Alberta’s population overall grew from 4,424,557 in the fourth quarter of 2020 to 4,464,170 in the fourth quarter of 2021.
And according to Alberta’s 2021-22 Mid-year Fiscal Update and Economic Statement, immigration into the province is recovering from last year’s pandemic lows as travel restrictions are lifting and application processing is ramping up. After slowing to a multi‑decade low of 0.5 per cent in the 2021 census year, Alberta’s population growth is expected to improve to 0.8 per cent next year, it said. Over the medium term, population growth is anticipated to trend up to pre‑pandemic levels, reaching 1.4 per cent by 2024, added the government.
The forecast is for immigration to remain a key driver and it is projected to surpass 2019 levels in the 2023 census year as the federal government steps up its targets for growth here.
With increasing immigration, the prospect of more interprovincial migrants because of a strong economy and jobs, and the natural increase of population, the demographics all bode well for supporting and strengthening Alberta’s multi-family residential market in the coming years.
Chris Chornohos has a passion for real estate and helping his clients reach their business goals by providing Real Estate Investors and Owners with the first class valuation and advisory services to close more deals. Chris is also an investor, builder and developer. Reach out to Chris today to help with your Real Estate needs.
*Image source: https://chiefexecutive.net/companies-often-grow-faster-people/